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THE CONSTRUCTION INDUSTRY IN CANADA

Lauren Albano, Jessica Moffit, Anthony Palladino, Thameera Uthayakumar & Bryan Watson

Published March 30, 2020; updated May 5, 2020

INDUSTRY OVERVIEW

The construction industry in Canada is a major driver of the economy, accounting for 6 percent of Canada’s GDP and employing over 1.2 million people (Government of Canada, 2018). In 2010, 7.1% of employed Canadians aged 15 and older worked in the construction industry (Government of Canada, 2018).

The construction industry is heavily tied to the Canadian economy; in times of growth the sector booms, in times of recession the sector declines as well (Government of Canada, 2018). During the recession in 2008-2009, employment decreased by 1.6 percent across Canada, whereas employment in construction fell 5.7 percent. In 2010, as the economy began to improve, employment throughout Canada grew by 1.4 percent while employment in construction increased by 4.9 percent (Government of Canada, 2018).

The construction industry has operated similarly for the past 50 years, with a heavy reliance on manual labour, mechanical technology and established operating and business models (Castagnino, Rothballer, Abreu, & Zupancic, 2018). The sector employs many different types of skilled and unskilled workers including architects, consultants, labourers, engineers, general contractors, project managers, carpenters, bricklayers, plumbers, pipefitters, electricians, painters, roofers, drywallers, sheet metal workers, and glaziers (Pries & Janszen, 1995) (Government of Canada, 2020a). While trades vary in terms of certain work activities, training, skill level, and assessed value in the labour market (Pries & Janszen, 1995), having qualified workers across all trades on the job site is important for the profitability of the company and the health and safety of the workers (Kennedy, 2018). Construction trades helpers/labourers assist skilled tradespersons to perform labouring activities at construction sites, quarries, and in mines (Government of Canada, 2020a).

Registration with a union or professional college is often necessary to work on a construction site. The Provincial Building and Construction Trades Council of Ontario represents 12 craft unions in the construction sector with over 150,000 workers throughout the province of Ontario in the following construction sectors: industrial, commercial, and institutional construction, electrical power systems, residential construction, heavy engineering, roads, sewers and water mains, and pipelines (The Provincial Building and Construction Trades Council of Ontario, 2019).

The construction industry is impacted by public and private businesses, as well as multiple levels of government oversight and legislation (Construction Trades Council of Ontario, 2019). In Ontario, the provincial government provides oversight of the construction industry to ensure it is well-regulated, competitive, well-resourced, and safe (Construction Trades Council of Ontario, 2019). Interestingly, levels of government are also often customers creating an odd duality of being both the ‘boss’ and the ‘customer’.

DEMOGRAPHICS

In 2018, women accounted for almost 48 percent of the Canadian workforce but made up 12 percent of the construction workforce; however, 76 percent of women working in the construction industry worked in office support occupations (Canadian Construction Association, 2019). So, while women made up about 12 percent of construction employment, women working on-site in the skilled trades accounted for only 4 percent of construction workers (Canadian Construction Association, 2019). Out of all industries in Canada, the construction industry has the lowest share of women-owned enterprises at about 7 percent (Canadian Construction Association, 2019).

In Canada, construction workers are historically white, though immigrant populations came to Canada to build infrastructure (Avery, 2013). Many Irish immigrants arrived in Canada in 1840s and 1850s in search of work (Avery, 2013). “Because of their propensity for hard work and their ethnic cohesiveness, they virtually monopolized certain jobs in the lumber camps, on the docks, and within a sprawling network of canal and railway camps” (Avery, 2013). Migrant labour was used extensively for the construction of the Canadian Pacific Railway (Avery, 2013). Canada marketed jobs to Chinese migrant workers who were imported specifically to build the railway then heavily taxed for their presence in and travel to Canada (Avery, 2013). The rapid expansion of ocean and rail transportation in the late 1800s made it easier for European workers to travel to Canada (Avery, 2013). About 900 000 unskilled and skilled workers arrived in Canada between 1907 and 1930 (Avery, 2013).

The Canadian Construction Association notes that new Canadians are an untapped resource for the construction industry (Canadian Construction Association, 2019). The Temporary Public Policy for Out-of-Status Construction Workers in the Greater Toronto Area (GTA) filled a regional labour market need by facilitating access to permanent resident status for 500 construction workers and their families in the GTA (Government of Canada, 2020b).

Western regions in Canada have been successful at attracting Indigenous workers to the construction industry; however, “despite an estimated 26 percent of Indigenous Canadians residing in Ontario, the province has the second-lowest share of Indigenous workers in construction” (Canadian Construction Association, 2019).

The Business Development Bank of Canada found that 48 percent of construction organizations surveyed said it had been difficult to hire new workers over the past year (Kennedy, 2018). Competition for young talent is cited as one of the key concerns that contractors need to address to maintain their workforce (Kennedy, 2018). Science, technology, engineering, and mathematics students are highly desired in the construction industry; however, the construction industry notes it is not as glamourous as the technology industry which is competing for talent (Kennedy, 2018). The Canadian Construction Association requested funding for 1,000 co-op positions from the Canadian government to attract students to construction (Kennedy, 2018). The construction industry has an opportunity to redesign its approach, and the culture of the work so it will draw in youth, Indigenous people, women, and minority workers (Kennedy, 2018).

In general, the gender wage gap in Canada has narrowed over time; however, a gap persists despite women in Canada surpassing men in educational attainment, diversifying their fields of study at post-secondary institutions, and increasing their representation in higher-status occupations (Pelletier, Patterson & Moyser, 2019). Research from 2018 found that women working in the construction industry between the ages of 25 to 54 earned $24.92 per hour, compared to $31.05 earned by men (The Canadian Press, 2019). This difference is $4.13 less for women, which means that women earn about 87 cents for every dollar earned by men. The construction, manufacturing, and mining, quarrying, and oil and gas extraction were the three industries which drove the gender wage gap over the past 20 years due to employing substantially larger shares of men than women, and due to their relative wage premiums (Pelletier, Patterson & Moyser, 2019).

Although not all workers show forms of discrimination towards women, history and stereotypes of misogyny within the field persist as some construction workers still believe it is a man’s job (The Canadian Press, 2019). With an average age of 42 years old, the construction sector is mainly made up of older, male workers (Singer, 2019).

CONSTRUCTION INDUSTRY EMPLOYMENT RISKS

About 80,000 construction workers suffer from various work-related health concerns each year including mental, physical, and financial health issues that impact the overall wellbeing of workers (Jacobsen, Caban-Martinez, Onyebeke, Sorensen, Dennerlein, & Reme, 2013). These health impacts can compound leading to very poor health outcomes. Most construction takes place in physically dangerous environments which are often created by doing the job. Construction workers have the potential to be exposed to harmful materials including lead, toxic chemicals, gases, and dust containing silica or asbestos, just to name a few. These hazards may cause physical damages such as asthma, lung disease, and cancer (Jacobsen et al., 2013). Loud noise is also present at many job sites which can cause tinnitus (Jacobsen et al., 2013). Working alone is a dangerous situation on a construction site if in an emergency. Falls from heights, electric shocks, brain injuries, loss of digits or limbs and motor vehicle accidents can all occur on construction job sites (Citizen General, 2015).

All job sites in Ontario are mandated to follow regulations in the Occupational Health and Safety Act and the Employment Standards Act. If regulations are followed by all stakeholders (employers and employees) the likelihood of accidents and injury at work is reduced. Insufficient lighting, uncomfortable temperatures and long working hours create mental and physical burdens on workers in the construction industry (Citizen General, 2015).

Most construction workers reported working at least 40 hours a week (Government of Canada, 2018). Long workdays can create stress and fatigue (Dwyer, 2014). Construction workers are prone to stress, depression, and anxiety as balancing between work and family can be very difficult (Dwyer, 2014). Due to hegemonic masculinity that has defined the construction trade for many years, many workers reported not feeling able to share feelings of stress, depression, and anxiety as those feelings and thoughts do not match the idea of the strong, male construction worker (Dwyer, 2014).

At the time of initial publishing (March 30, 2020), construction is on Ontario’s list of essential services that can operate during the COVID-19 social distancing precautions including transit projects, health-care facilities, demolition services, and construction in the industrial, commercial, institutional and residential sectors (Dunne, 2020). Quebec instituted a broad industry shutdown this week, so some workers on large job sites, unions and contractors are lobbying the government of Ontario to decrease its definition of ‘essential construction’ as they argue the government is putting workers and the public at risk (Dunne, 2020).

STATE SUPPORT FOR HEALTH AND WELLBEING

It is important to understand the mental and physical risks involved in the construction industry, just as it is important to take actions accordingly, to ensure the better health of the entire community. The federal and provincial governments legislated initiatives to provide support for the construction industry and its workers. There are several mandatory factors that are in place to benefit workers:

  • All workers receive health and safety training to ensure that protective equipment and safety precautions are learned, implemented and used correctly by all workers on the job (Government of Canada, 2008). Employers are legislated to provide personal protective equipment and direction for the safe use of all machinery, tools, and equipment on the job (Government of Canada, 2008). Training and safety equipment must be accurately and appropriately provided to workers for the job without cutting corners on cost (Government of Canada, 2008).
  • Routine breaks are scheduled for construction workers who are prone to long hours and intense conditions to reduce fatigue and prevent injury (Schnieder, 2015).
  • An organizational culture of health and safety adherence and reporting is extremely necessary to ensure that safety is paramount on the job site which promotes a positive working relationship with managers and peers and reduces stress (Schnieder, 2015).
  • Routine safety inspection of the job site and equipment is also a key factor in supporting this industry. Realizing that their working conditions are extremely harmful, these inspections must be done to ensure that all materials are in working order, this can prevent serious injury and death (Schnieder, 2015). These risk assessments also create awareness of the safety precautions that need to be taken. All workers, employers, and other people on the job site are responsible for the health and safety of those on site (Schnieder, 2015).

INDUSTRY CHALLENGES

Across Canada, the construction industry is generally growing; however, due to the size and diversity of the country, there is varied growth (Kennedy, 2019). While the forecast from most industry watchers is generally positive, long-standing issues such as “labour shortages, technology integration and concerns about Canada’s business climate threaten to pose real challenges for builders next year” (Construction Canada, 2019). Limited economic performance in the oil, gas and resource sectors negatively impacts the construction industry in Alberta, Saskatchewan, and the Maritime Provinces (Kennedy, 2019). Elsewhere, significant infrastructure, residential and commercial expansion in cities like Montreal, Ottawa, Toronto, and Vancouver produced optimism for growth of the industry (Kennedy, 2019) before the current financial, social, and health impacts were created by the ongoing COVID-19 outbreak. The 2019 Canadian Infrastructure Report Card found that 40 percent of Canada’s roads and bridges are in fair, poor or very poor condition (Kennedy, 2018).

Over the next decade, 250,000 aging workers will retire: this amounts to 21 percent of the workforce (Kennedy, 2018). “As fewer young workers embrace construction and a large cohort of industry veterans step out of their steel toes for good, experts agree that simply maintaining the status quo isn’t an option” (Kennedy, 2019). Organizations that embrace innovation and technology will be favourable with younger workers (Pries & Janszen, 1995). For an organization to compete in the construction industry in a high-demand market, innovation is key to achieving competitive advantage; for workers, specialization in a trade or high diversification in various trades is one of the most important strategic choices (Pries & Janszen, 1995).

Canada’s federal and provincial political landscapes also support the construction industry (Construction Canada, 2019). The construction industry has an obvious relationship with its economic environment; when external circumstances are positive, the industry thrives (Pries & Janszen, 1995). When politics favour economic growth the construction industry is very capable of innovation (Pries & Janszen, 1995). The United States is Canada’s largest trading partner, so American politics like tariffs and the Trump presidency play a role in the Canadian construction industry (Construction Canada, 2019).

Canada’s relationship with the environment poses challenges and opportunities for the construction industry. Public concern for the environment has created global political turbulence which impacts the Canadian construction industry (Pries & Janszen, 1995). When the Canadian government passed environmental bills C-48 and C-69 in 2019 to ensure organizations maintain certain environmental, health, social, or economic impacts some opponents cited these as major obstacles for construction (Kennedy, 2019).

To oppose severe labour shortages, the government was asked to match recent immigrants with the many trades’ occupations; however, newcomers struggle in the Canadian labour market (Oreopoulos, 2011, p. 149). Oreopoulos notes that immigrants’ wage trajectories have the potential to increase if newcomers were provided with assistance to help them find work (2011, p. 167). The average wages of recent immigrant workers are 36 percent lower than Canadian-born workers and unemployment rates compared to non-immigrant workers are almost double (Oreopoulos, 2011, p. 148). Interestingly, Canadian immigration policy focuses on attracting newcomers with high levels of education, experience, and industry demand to offset the anticipated skilled labour force shortage (Oreopoulos, 2011, p. 148).

FUTURE GROWTH

The future of the construction industry can be articulated as limited. Before the global outbreak of COVID-19, GlobalData expected Canada’s construction industry to grow by only 0.5 percent (Design Build Network, 2019). In addition to the struggles of the oil industry, weak economic conditions, strict mortgage regulations, and elevated household debt levels could keep consumption and expansion at minimal growth rates in the residential subsector (Design Build Network, 2019). Global rapid urbanization, climate change, resource scarcity and a growing talent gap due to the advancement of technology require players in the construction industry to embrace new technologies, materials, and practices to create change within their sectors (Castagnino, et al., 2018).

In Ontario, there are limited job opportunities for construction trades helpers and labourers (unskilled workers); the unemployment rate for these workers is 13.9 percent (Ministry of Labour, n.d.). According to Canada’s Occupational Projection System (COPS), between 2017 – 2026 an employment surplus will be created (Government of Canada, 2020a). Essentially, the number of people entering the sector looking for jobs will overtake the possible number of positions that can be occupied. Over this time, COPS estimates that 35,300 new positions will be created, whereas 39,700 new job seekers will be looking to occupy a position (Government of Canada, 2020a). This means that 4,400 people will be unemployed in the construction sector (Government of Canada, 2020a). This surplus may limit growth because it may discourage young people from entering the field due to low entry-level opportunities. Future job seekers in the construction industry will have to wait for the current aging workforce to retire.

The future of the construction industry in Canada will embrace new technologies to increase profit. Castagnino, et al. argue that “any future scenario requires talent with substantially different skills than today’s workforce possesses, and adequate upskilling processes are largely not in place” (2018). The technological shift offers great benefit towards construction workers as it may make the working process easier and faster as well as increasing quality while remaining safe; however, Kennedy argues that current adoption of technology like drones, automated equipment, and machine learning remains inconsistent due to some contractors aggressively investing in tech while other (perhaps older members of the workforce) rely on tools and older, outdated work processes (2019).

It is believed that those who do not invest in technology will slowly be left behind in the workforce as they become irrelevant and invaluable as construction companies are already experimenting with technology to innovate faster than competitors (Kennedy, 2019). These technology firms and their machines may end up taking construction workers’ jobs as they will be able to build a quality structure, faster and cheaper than labourers (Kennedy, 2019).

In the end, the future of construction workers in Canada is questionable as workers will be needed to replace the aging workforce; however, technology and streamlining will decrease the need for entry-level, unskilled workers. The economic and social impact of changing technologies in construction could be substantial, as the construction industry accounts for 6% of global GDP and employs more than 100 million people worldwide (Castagnino, et al., 2018). Over the next 10 years, full-scale digitization could save the industry between $1 trillion and $1.7 trillion annually (Castagnino, et al., 2018).

REFERENCES

Avery, D. H. (2013, December 16). Immigrant Labour. The Canadian Encyclopedia. Retrieved March 27, 2020, from https://www.thecanadianencyclopedia.ca/en/article/immigrant-labour. Accessed 29 March 2020.

Canadian Construction Association. (2019). The value of diversity and inclusion in the Canadian construction industry. Retrieved from https://www.cca-acc.com/wp-content/uploads/2020/01/CCA_13413_Business_Case_EN.pdf

Castagnino, S., Rothballer, C., Abreu, J., & Zupancic, T. (2018, March 15). 6 ways the construction industry can build for the future. Retrieved March 27, 2020, from https://www.weforum.org/agenda/2018/03/how-construction-industry-can-build-its-future/

Citizen General. (2015, November 12) The 10 Biggest Problems in Construction Solved. Citizens General Insurance Brokers. Retrieved on March 16, 2020, from https://www.citizensgeneral.com/business-insurance-news/postid/29/the-10-biggest-problems-in-construction-solved.

Construction Canada. (2019, July 5). Surveying the 2019 design/construction landscape. Retrieved March 27, 2020, from https://www.constructioncanada.net/surveying-the-2019-design-construction-landscape/4/

Design Build Network. (2019, July 1). Canada construction outlook: New government bill creates friction. Retrieved March 27, 2020, from https://www.designbuild-network.com/comment/canada-construction-outlook-2019/

Dunne, J. (2020, March 27). In Ontario, construction is an essential service, but some workers fear COVID-19 puts them at risk. CBC. Retrieved from https://www.cbc.ca/news/business/ontario-essential-contruction-1.5510516

Dwyer, M. (2014, June 4). Construction Workers Struggle with Pain, Stress from Injuries. Harvard T.H. Chan School of Public Health. Retrieved March 16, 2020, from www.hsph.harvard.edu/news/features/construction-workers-struggle-with-pain-stress-from-injuries/

Government of Canada. (2008, January 7). Mental Health – Coping With Stress. Retrieved March 18, 2020, from www.canada.ca/en/health-canada/services/healthy-living/your-health/lifestyles/your-health-mental-health-coping-stress-health-canada-2008.html

Government of Canada. (2018, January 17). Construction. Retrieved March 20, 2020, from https://www150.statcan.gc.ca/n1/pub/11-402-x/2011000/chap/construction/construction-eng.htm

Government of Canada. (2020a, January 22). Construction Worker in Canada. Retrieved March 21, 2020, from https://www.jobbank.gc.ca/marketreport/outlook-occupation/8448/ca

Government of Canada. (2020b, January 2). Temporary public policy for out-of-status construction workers in the Greater Toronto Area. Retrieved March 29, 2020, from https://www.canada.ca/en/immigration-refugees-citizenship/corporate/mandate/policies-operational-instructions-agreements/permanent-residence-construction-workers-gta.html

Jacobsen, H. B., Caban-Martinez, A., Onyebeke, L. C., Sorensen, G., Dennerlein, J. T., & Reme, S. E. (2013). Construction workers struggle with a high prevalence of mental distress, and this is associated with their pain and injuries. Journal of occupational and environmental medicine, 55(10), 1197–1204. https://doi.org/10.1097/JOM.0b013e31829c76b3

Kennedy, D. (2018, December 5). Canadian construction outlook positive for 2019, but last year’s setbacks could cast a long shadow. On-Site: Canada’s Construction Magazine. Retrieved March 27, 2020, from https://www.on-sitemag.com/features/canadian-construction-outlook-positive-for-2019-but-last-years-setbacks-could-cast-a-long-shadow/

Kennedy, D. (2019, December 18). 2020 Construction Forecast: Positive momentum to continue, but industry needs to embrace change. On-Site: Canada’s Construction Magazine. Retrieved from https://www.on-sitemag.com/features/2020-construction-forecast-positive-momentum-to-continue-but-industry-needs-to-embrace-change/   

Ministry of Labour, Training and Skills Development. (n.d.). Construction trades helpers and labourers. Retrieved March 4, 2020, from https://www.iaccess.gov.on.ca/labourmarket/jobProfile/jobProfileFullView.xhtml?nocCode=7611

Oreopoulos, P. (2011). Why Do Skilled Immigrants Struggle in the Labor Market? A Field Experiment with Thirteen Thousand Resumes. American Economic Journal: Economic Policy, 148–171. Retrieved from https://avenue.cllmcmaster.ca/d2l/le/content/307313/viewContent/2566180/View

Pelletier, R., Patterson, M., & Moyser, M. (2019, October 7). The gender wage gap in Canada: 1998 to 2018. Retrieved March 27, 2020, from https://www150.statcan.gc.ca/n1/pub/75-004-m/75-004-m2019004-eng.htm

Pries, F., & Janszen, F. (1995). Innovation in the construction industry: the dominant role of the environment. Construction Management and Economics. doi: 10.1080/01446199500000006

Schneider, S. (2015, September). Addressing the Root of the Stress Problem in Construction. Laborers’ Health & Safety Fund of North America. Retrieved from https://www.lhsfna.org/index.cfm/lifelines/september-2015/addressing-the-root-of-the-stress-problem-in-construction/

Singer, C. R. (2019, February 15). Canada Needs to Act Now or Face Construction Labour Shortage: Report. Retrieved March 24, 2020, from https://www.immigration.ca/canada-needs-to-act-now-or-face-construction-labour-shortage-report

Statistics Canada. (2020, March 9). Building permits, January 2020. Retrieved March 27, 2020, from https://www150.statcan.gc.ca/n1/daily-quotidien/200309/dq200309a-eng.htm

The Canadian Press. (2019, October 8). Gender wage gap narrows to 13.3 percent but construction not contributing: StatsCan. Retrieved March 24, 2020, from https://canada.constructconnect.com/dcn/news/labour/2019/10/gender-wage-gap-narrows-to-13-3-per-cent-but-construction-not-contributing-statscan

The Provincial Building and Construction Trades Council of Ontario. (2019). Who We Are. Retrieved March 27, 2020, from https://ontariobuildingtrades.com/who-we-are/

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